The Fourth Industrial Revolution

is here—are you ready?

The Fourth Industrial Revolution is here—are you ready?

Deloitte helps organisations understand the opportunities and risks presented by the Fourth
Industrial Revolution and apply that insight in pursuit of key objectives. We draw on deep industry
experience and extensive knowledge in artificial intelligence, the Internet of Things, analytics and
other technologies underpinning Industry 4.0 to help organisations develop and execute innovative
approaches to better serve their customers, people, communities and other critical stakeholders.

COVER IMAGE BY: John W. Tomac

 The Fourth Industrial Revolution is here—are you ready?

CONTENTS

A mix of hope and ambiguity | 2

Social impact: optimism vs. ownership—

the role of business in shaping the 4.0 world | 4

Strategy: static vs. dynamic—taking a broader,

strategic view | 7

Talent and the workforce: evolution vs.

revolution—the future of work | 11

Technology: challenged vs. prepared—

embracing the full potential of Industry 4.0 | 15 

Summary | 20

Methodology | 21

Acknowledgments | 21

1
The Fourth Industrial Revolution is here—are you ready?
A mix of hope and ambiguity
T
HE concept of digitising everything is
becoming a reality. Automation, artificial
intelligence, IoT, machine learning and other
advanced technologies can quickly capture and
analyse a wealth of data that gives us previously
unimaginable amounts and types of information
to work from. Our challenge becomes moving to
the next phase—changing how we think, train and
work using data—to create value from the findings
obtained through advanced technologies.”
Brian Householder, President and
Chief Operating Officer, Hitachi Vantara
Are the leaders of businesses and government
agencies ready to harness the full potential of
Industry 4.0 to benefit their clients, their
people, their organisations, their communities
and society more broadly?
That’s the core question explored in a recent
Deloitte Global survey that sought to measure
business and government readiness for the Fourth
Industrial Revolution—or “Industry 4.0.”
The survey polled 1,600 C-level executives
across 19 countries, coupled with select interviews.
What ultimately emerged was a picture of the
opportunities and challenges these global leaders
saw in creating new value in a changing world—a
picture that conveys both hope and ambiguity.
Industry 4.0 signifies the fourth in a series of
industrial revolutions, which are characterised
by their ability to transform economies, jobs and
even society itself through the introduction of new
technologies and processes.
Beginning in the late 18th century with the
advent of steam power and the invention of the
power loom, the first industrial revolution ushered
in mechanisation and radically changed how
goods were manufactured. In the late 19th century,
electricity and assembly lines made mass production
possible, giving rise to the second revolution. Many
cite the third revolution as beginning in the 1970s,
2
when advances in computing enabled us to program
machines and networks, powering automation.
Definitions for Industry 4.0 abound, but the
change it portends at its core is the marriage of
physical and digital technologies such as analytics,
artificial intelligence, cognitive technologies and the
internet of things (IoT). This marriage of the physical
with the digital allows for the creation of a digital
enterprise that is not only interconnected, but also
capable of more holistic, informed decision making.
In a digital enterprise, data collected from physical
systems are used to drive intelligent action back
in the physical world. It is the possibilities arising
from these feedback loops that generate abundant
opportunities for new products and services, better
ways to serve customers, new types of jobs and
wholly new business models.
As in the previous industrial revolutions, the
impact of these changes has the potential to ripple
across industries, businesses and communities,
affecting not just how we work, but also how we
live and relate to one another. But this time, the
revolution is advancing at extraordinary speed,
driven by technologies developing at an exponential
rate. Amid shifting demographics and unprecedented
global connectivity—not just technological, but
also social and economic—Industry 4.0 can herald
greater opportunities than any that came before it.
And greater risks.
To explore the question of “readiness” for
Industry 4.0, Deloitte Global’s survey of C-level
executives focused on four major areas:
1. Social impact. What do these executives see
as their roles in making the world a better place
in the age of Industry 4.0—not just for their
organisations, but for society as a whole?
2. Strategy. How are executives using Industry 4.0
technologies to shift their mindsets, revolutionise
their decision making and inform their business
strategies to create new value?

3. T a l e n t a n d t h e w o r k f o r c e . H o w a r e
executives readying their current talent strategies
and workforces for the changes Industry 4.0 will
bring, and where will new talent come from?
4. Technology. Do executives see Industry 4.0
technologies as a toolset to improve business as
usual, or are they harnessing the full potential
of smart technologies to enable digital-physical
integration, holistic decision making and new
business models?
What we discovered is that while executives
conceptually understand the changes Industry 4.0
will bring, they are less certain how they can take
action to benefit from those changes. In each of the
four areas of impact, the survey uncovered some
tension between hope and ambiguity:
1. Social impact.
Optimism vs. ownership: While executives see
a more stable future with less inequality, they are less
convinced about the role they or their organisations
have to play in influencing society in an Industry 4.0
• Executives overwhelmingly (87 percent) believe
era.
Industry 4.0 will lead to more social and economic
equality and stability, and two out of three say
business will have much more influence than
governments and other entities shaping this future.
• However, less than a quarter believe their own
organisations hold significant influence over societal
key factors such as education, sustainability and
social mobility.
2. Strategy.
Static vs. dynamic: Executives acknowledge they
may not be ready to harness the changes associated with
Industry 4.0. However, this lack of readiness has not
compelled them to alter their current strategies.
• Only one-third of the executives surveyed are highly
confident they are capable of acting as stewards
for their organisation during this time of change.
Further, just 14 percent are highly confident that
their organisations are ready to fully harness the
changes associated with Industry 4.0.
3
The Fourth Industrial Revolution is here—are you ready?
• Yet many executives continue to focus on
traditional business operations, as opposed to
focusing on opportunities to create new value for
their direct and indirect stakeholders.
3. Talent and the workforce.
Evolution vs. revolution: Executives lack
confidence that they have the right talent in place to be
successful in Industry 4.0. They say they are doing all
they can to build the right workforce, but their responses
show talent remains low on their list of priorities.
• Only a quarter of executives are highly confident
they have the right workforce composition and the
skill sets needed for the future.
• However, talent and HR are a relatively low priority
(17 percent), despite 86 percent of executives saying
they are doing everything they can to create a
better-prepared workforce for this new era.
4. Technology.
Challenged vs. prepared: Executives understand
they need to invest in technology to drive new business
models; however, they have a hard time making the
business case for that investment because of a lack of
internal strategic alignment and short-term focus.
• Executives say their current technology investments
are strongly driven by technology that can support
new business models, which they say will have one
of the greatest impacts on their organisations over
the next five years.
• However, very few executives say they have a strong
business case for investing in advanced technology.
When asked what the hindrances were, executives
most often point to a lack of internal alignment
(43 percent), a lack of collaboration with external
partners (38 percent) and a focus on the short term
(37 percent).
In the following discussion, we’ll explore the
survey responses in more detail as a way to assess
executives’ readiness for Industry 4.0 within the
context of our four major areas of impact: society,
strategy, talent and technology.
The Fourth Industrial Revolution is here—are you ready?

Social impact:
optimism vs. ownership
The role of business in shaping the 4.0 world

E
XECUTIVES are optimistic about the impact of having very different, very particular rules regarding
Industry 4.0. Eighty-seven percent of survey management of data, and start with the European
participants believe that Industry 4.0 will lead to Figure #. Figure title
Union membership (Open Sans
countries,” says Bold, 9pt)
Frithjof Netzer,
more social and economic equality and stability. They SVP and chief digital officer, BASF Group.
**Reduce artboard height and width as needed to chart siz
seem to regard technology as an equaliser that will Because executives 2-column or full-width
view business chart = 6” (Full-page size = 6” x 8
as having
provide more access to education, jobs and financing the mostSingle-column
impact, it should follow that
or half-width chart they would
across different geographies and social groups. But expect their organisations
Adjust artboard widthto play influential roles
to: 2.8437”
new technologies will also require different skills and
will likely impact jobs—at least for some—which could
potentially lead to income disparity and uncertainty. Figure 1: Which of the following entities
In addition, Deloitte’s Shift Index1 indicates that do you believe will have the most
influence over how Industry 4.0 will
the cumulative effects of technological advances and Figure 2: To what d
shape society? (Select up to 3)
demographic changes are starting to turn up the steep organization consid
part of an exponential curve, suggesting that change 74% influence the follow
may be speeding up to levels far beyond previous Number of respondent
67% a significant degree”
industrial revolutions.2
“If you look at the first, second or third industrial 60%
revolutions, the technology was changing, but over
full lifetimes or a couple of generations,” says Xavier
Bourgois, chief information officer at technology firm 45%
Barco. “Now we have revolutions that take less than 39%
a generation. You have people who know how to fix a 36%
cassette, but their children do not even know what it 29%
was used for. When my six-year-old son is watching 25% 25% 24%
a movie on a TV screen, he goes to the TV screen and
tries to swipe it.”
12%
There is no question Industry 4.0 will bring about
significant change for almost every aspect of society. A
large majority of executives see business—both public
(74 percent) and private (67 percent)—as having
Public business organisations Delivering the best
the most influence on how Industry 4.0 will shape service to custome
Private business organisations
society, with government coming in a distant second, Delivering strong fi
Governmental agencies/regulators in the long term
and intergovernmental bodies and nongovernmental
Intergovernmental cooperation/ Delivering strong fi
organisations playing even less of a role. in the short term
alliances/agreements
That is not to say that government doesn’t have Becoming an agen
Grassroots movements
a significant role to play. “The government could level and fair mark
Non-governmental agencies (NGOs)
help in terms of getting transmission speeds up, Serving underserve
Not-for-profits/charities/ accessibility/afford
paving the ground for dissemination of 5G, and
private charitable foundations Social and geograp
unifying or standardising legalities when it comes to
Education/training
learning of employ
Environmental sus
4
 The Fourth Industrial Revolution is here—are you ready?

in delivering this more-equitable and stable world.

However, our results reveal that executives do not
believe their own organisations have significant sway “New technology has
over societal issues such as education and learning
for employees, environmental sustainability or social the ability to change the
and geographic mobility (Figure 2).
This finding may seem troubling to some, as it
economics of banking.
suggests that executives believe little is significantly
within their organisation’s control beyond the
Banks can now serve
en Sans Bold, 9pt)
ability to deliver the best possible products or
duce artboard height and width as needed to chart size***
previously underserved
services to customers (60 percent). The rest may
lumn or full-width chart = 6”
simply be viewed=as
(Full-page size 6”depending
x 8.75”) on too many other, communities. We are
alf-width chart external factors. But in the arena of social
dth to: 2.8437” impact, organisations that lack a sense of starting to see change
ownership in shaping a “better world” may be
handicapping their ability to thrive in the Industry in the developing world
following entities
ve the most
dustry 4.0 will
4.0 environment.
thanks to technology
up to 3) Figure 2: To what degree does your
organisation consider itself able to significantly lowering the
influence the following issues?
Number of respondents who answered, “To cost of delivery. Micro-
a significant degree”

60%
finance initiatives and
small-scale retail banking
are beginning to take off.”
% —— John Flint,
36%
Chief Executive, Retail Banking and
29% Wealth Management, and CEO-elect,
25% 25% 24% HSBC
19%
17%
12% 12% While environmental, social and governance (ESG)
10%
ratings and corporate social responsibility (CSR)
initiatives are now standard—and many corporations
have signed on to the United Nations Sustainable
zations Delivering the best possible product/ Development Goals—it does not seem that businesses
service to customers receive enough motivation or support to steer their
izations
Delivering strong financial results strategies toward serving broader stakeholders and
s/regulators in the long term
Delivering strong financial results addressing social issues. In fact, just 35 percent of
operation/
in the short term surveyed executives believe that leading organisations
s Becoming an agent of change for a of the future need to spend more time preparing for the
level and fair marketplace
encies (NGOs) impact new solutions will have on society. “The format
Serving underserved markets/
accessibility/affordability
in which we discuss corporate success determines the
s/
dations Social and geographic mobility
realities that business leaders can understand, and
sustainability goals are still too subservient to the
Education/training/lifelong
learning of employees financial returns,” says Joi Ito, director of MIT Media
Environmental sustainability Lab. This reality gap is further underscored by the

5
The Fourth Industrial Revolution is here—are you ready?

expectations of millennials, who believe multinational
businesses are not fully realising their potential to
alleviate society’s biggest challenges.3
Brian Householder, president and COO at Hitachi
Vantara, agrees that the day-to-day responsibilities
of running the business take precedence over social
vision. “While we have existing franchises that we
have to manage, we also have to consider how we are
changing our organisation to make sure that we’re
continuing to drive social values into the industry,
into the world. It is important for us to figure out
how to lead to stay relevant.”
If executives truly expect business to play a
leading role in the far-ranging societal implications
of Industry 4.0, then its leaders must factor into
their strategic planning the interrelationships among
a broader set of stakeholders. organisations are
beginning to use Industry 4.0 technologies, coupled
with a social and environmental impact mindset, to
build differentiated products, explore new markets,
secure a sustainable supply chain, attract and
retain millennial talent, and transform contentious
regulatory relationships, among other things.
Business’ challenge will be finding ways to design
and create models for driving transformative change
that also result in positive social impact. Harnessing
Industry 4.0 technologies for social impact can help
build markets, drive adoption and light a powerful
beacon for attracting and retaining top talent.
organisations also will need to consider the ethics
and morality of applying advanced technologies
beyond the traditional risk concerns of security,
privacy, regulatory, compliance, safety and quality.4
EXPLORE FURTHER
Pro-business, but expecting more5:
Millennials view business positively, but they
believe multinational businesses are not fully
realising their potential to alleviate society’s
biggest challenges.
Social impact of
exponential technologies6:
With great power comes great
responsibility—and disruptive technologies
are potentially some of the most powerful
forces in the business world today. How can
businesses use exponential technologies to
drive transformative change and positive
social impact?

THE GEOGRAPHICAL PERSPECTIVE

A lack of confidence in the future correlates with the lack of confidence in executives’ ability
to act as stewards of Industry 4.0. Asia-Pacific (APAC) stands out as the region with the lowest
confidence in both these areas. One-fifth of respondents think they will face social upheavals
and increased income inequality, while North American and Latin American executives are the
least concerned (8 percent and 6 percent respectively). Executives from the Europe/Middle East/
Africa (EMEA) region are in the middle, with 14 percent expressing concerns about social issues
resulting from Industry 4.0.

Only 8 percent of APAC executives see themselves as highly capable to act as stewards during this
time of change and disruption. This stands in stark contrast to the views expressed by executives
from the Americas. Forty-eight percent of executives from the Americas consider themselves
highly confident about their abilities to act as stewards. The EMEA region’s confidence is more
moderate, at 36 percent.

Three countries in particular—India (32 percent), South Africa (28 percent) and China (23
percent)—envision social upheavals and increased income inequality as a result of Industry 4.0.
These countries have all recently undergone major economic or political changes, which, in some
cases, resulted in high growth, but also introduced previously unknown social fissures. This may
contribute to their higher sensitivity about weathering additional social issues in the future.

6
 The Fourth Industrial Revolution is here—are you ready?

Strategy: static vs. dynamic

Taking a broader, strategic view

W
Figure 4: Which of the
HILE we often hear about “great Figure 3: Over the course of a year, what will have the greatest
disruptors” coming along and upending topics do you discuss most frequently organization over the
as an organisation? (Select up to 5) (Select up to 3)
entire industries, or even established
organisations using innovation effectively to 57% 56%

reinvent themselves or introduce new products

49% 49% 48%
or services, not all organisations are making such
42% 41% 40%
strides. Many executives recognise the changes 39% 39%
Industry 4.0 portends, but are not sure how to 32% 31%
capitalise on the opportunities. In fact, just 14 30% 30%
2
percent of surveyed executives feel highly confident 24%
22%
that their organisations are ready to fully harness the
17%
opportunities associated with Industry 4.0.
One reason for this lack of confidence could
be that many executives also continue to focus
on traditional business operations, as opposed to
focusing on opportunities to create new value for their Developing/creating new products and services Changing regulatory e

direct and indirect stakeholders. For example, when Increasing productivity Emergence of new bu
asked what topics they discuss most frequently as an Improving top-line growth Evolving economic/tra
organisation over the course of a year, topping their Increasing speed to market Smart and autonomou
list were developing business products (57 percent) Introducing new business models More powerful and te
and increasing productivity (56 percent). These Adopting new and advanced technologies Blurred lines between
are important issues for Industry 4.0, since one across the whole enterprise and digital worlds
of its hallmarks is developing innovative products Preparing for the impact that new Blurred lines between
and services, as well as increasing productivity, by solutions will have on society
Increasing threat of cy
Reducing operating costs
using new technologies and/or the data created by Uncertain impact on w
connected objects.7 Responding to cyber risk
Potential geopolitical i
However, Industry 4.0 offers great opportunities Disrupting competitors
for innovation well beyond products and services Protecting existing assets
that may require a new set of approaches in areas Talent or HR
such as talent, cyber risk and competitive disruption.
These are areas in which Industry 4.0 applications
can, for example, help deliver continuous learning, future. When the question was shifted to a more
tap new sources of talent, reach underserved forward-looking perspective (“To be a leading
markets, offer predictive tools to help improve organisation in the future, which of the below elements
processes and reduce risk, connect supply chains, do you think you should spend time thinking
create new ecosystems, enable more agile systems about/focusing on?”), the order of priority remained
that can adapt and respond to changes in real time virtually the same. This seems to indicate that being
and much more.8 And yet, these issues trend to the a leading organisation in the future is currently
bottom of the list of priorities (Figure 3). seen purely through today’s business lens.
Perhaps more surprisingly, respondents’ priorities Taken together, our findings suggest that many
did not change much even when looking toward the organisations may be suffering from the phenomenon

7
The Fourth Industrial Revolution is here—are you ready?

known as “organisational inertia,” which occurs as a Factors impacting business

group remains fixated on its past accomplishments to
protect its current state, while unknowingly blind to
changes taking place within the marketplace.9 This can
leave well-established organisations more vulnerable
to disruption, as faster and more agile competitors can
be less susceptible to maintaining the status quo. The
underlying forces that drive organisations to inertia
can be difficult to recognise and avoid. This poses
significant risk, as those mired in inertia often fail to
realise it until financial performance takes a
downward turn or they have fallen so far behind the
competition that it becomes difficult, if not
impossible, to catch up.10
It is, therefore, crucial that organisations shift their
strategic mindsets to a broader set of areas to capitalise
on the opportunities Industry 4.0 will bring.
Figure 3: Over the course of a year, what
“The Fourth Industrial
topics do you discuss most frequently as
an organization? (Select up to 5)
Revolution creates
57% 56%
in the next five years
As executives look out at areas they expect to have
the most impact on their organisations in the next five
years, the changing regulatory environment and the
emergence of new businesses or delivery models are at
the top of their minds. The largest group of respondents
sees new regulations as having the greatest impact on
their organisations over the next five years (Figure 4).
The pace and breadth of technological changes stand to
further intensify the uncertainty around the regulatory
environment, as business executives question
whether regulations are keeping up with technological
advancements.11
Figure 4: Which of the following issues
issues
will have the greatest impact on your
organisation over the next 5 years?
(Select up to 3)

unlimited possibilities
49% 49% 48%

42% 41% 40%

for the people who are 39% 39%

32% 31%

interested in business. 30% 30%

29%
27%
24% 24%
22% 22% 21%
While it can be scary 17%

when companies apply

technology to transform
Developing/creating new products and services Changing regulatory environment
business
Increasing models
productivity in their Emergence of new businesses or delivery models
Improving top-line growth Evolving economic/trade landscape
industries or across other
Increasing speed to market Smart and autonomous technologies

industries, it generates
Introducing new business models
Adopting new and advanced technologies
More powerful and tech-savvy customer
Blurred lines between the physical
innovation and improves
across the whole enterprise
Preparing for the impact that new
and digital worlds
Blurred lines between industries

competitiveness.”
solutions will have on society
Reducing operating costs
Increasing threat of cyber risk

—— Chun-Yuan Gu, Uncertain impact on workforce

Responding to cyber risk
President of Asia, Middle East and Africa Region, Potential geopolitical instability
Disrupting competitors ABB
Protecting existing assets
Talent or HR

8
 The Fourth Industrial Revolution is here—are you ready?

“We have governing structures, legal systems,
rules and institutions that were appropriate for
the last industrial revolution, not this new one,”
says John Flint, chief executive, retail banking
and wealth management, and CEO-elect, HSBC.
New regulation will likely be a response to
how well—or not—government perceives business
is managing the impact of Industry 4.0 on the
workforce, the public sphere and the environment.
Taking a broader view of how business strategies
impact these stakeholders can help businesses
engage in a more productive conversation
with government about how the regulatory
environment evolves.
“Governments write the law on behalf of
their people, but I think big business has a
responsibility to catalyse the conversation,”
notes Flint. “We can’t write the laws. But we can
determine how we choose to behave. We can
express a view of risks and what right behaviors
and attitudes are, and then we can live by them.
I think as business leaders, we have to get this
debate going.”
Not all org anisat ions vie w chang
i n g regulations as a challenge. For McLaren
Racing, engineers look upon regulatory
changes as an opportunity to grow. “The
regulations in Formula 1 are reviewed every
year, so we are quite used to dealing with
change,” says Chief Operating Officer Simon
Roberts at McLaren Racing. “In most
businesses, when you have a regulation
change, people see it with fear. Here, we see it as
an opportunity for our engineers to go back to the
drawing board. From a technology and innovation
perspective, we have to be adaptable every year,
which is why we don’t work to a strict five-year
road map, because performance advantages in our
competitive world are gleaned from who responds
best each season to the ever-evolving parameters
the teams work within, according to the sport’s
regulations.”
Beyond regulations, many executives also
recognise that new business and delivery models,
as well as the evolving economic/trade landscape,
and smart and autonomous technologies, will
affect their organisations in the coming years.
As strategic discussions increasingly focus
on how business can evolve and capitalise on
innovation, executives cannot be myopic and
think only of near-term business growth. Rather,
it is important to take a more encompassing
and longer-term perspective that recognises
the enhanced role organisations can play in
the responsible use of disruptive technologies.
Successful organisations will take a broad view.
They will see connections between business
and social needs; between financial outcomes
and innovative strategies; between worker
productivity and a changing workforce; between
improving operations and creating new value.
Indeed, taking a broader view can pay off in the
end. organisations that have widened their focus
toward a more holistic, strategic view of how
Industry 4.0 allows them to generate new value
for a broader array of stakeholders may already
be rewarded with higher growth (see sidebar
“Broader View, Higher Growth” on page 10).

EXPLORE FURTHER

What really differentiates strategy is courage12:

Courage is the willingness to take action when it is hard, risky or scary to do so. In the tighter context
of business strategy, it’s the willingness to engage in courageous conversations, to spark courageous
considerations, and to make and execute courageous choices.

Courage under ire13:

Disruption is a topic everyone is talking about. While many organisations fear it, others realise the
many opportunities that disruptive technologies, processes and social norms present. But with every
opportunity comes an element of risk. Not every disruption will impact your enterprise positively.

9
The Fourth Industrial Revolution is here—are you ready?

BROADER VIEW, HIGHER GROWTH

An exclusive group of 6 percent of organisations surveyed have achieved growth of 10 percent or
more over the last fiscal year. Our analysis revealed that these high-growth organisations stand out
for their broad view of responsibilities and stakeholders. For example, their executives more often
see themselves as architects of society in addition to being business leaders. Also, high-growth
organisations are the ones that are more likely to focus on areas such as sustainability or learning.

Figure 5: Please rate your agreement with the following statements.

47%
30% 28% 27%
16% 18% 20% 19%
10% 11%

My organisation Talent/HR Becoming more My organisation can Social and geographic

can influence is one of the top collaborative with influence education/ mobility contributes to
environmental five topics that regulators and learning for employees the long-term health
sustainability to my organisation policy makers is one to a significant degree and sustainability of
a significant degree frequently discusses of the top three my organisation to
development areas for a significant degree
C-level executives

High-Growth organisations (10%+) All organisations Surveyed

Figure 6: Which of the following statements about the Fourth Industrial Revolution's
impact on the workforce is more true?
STRATEGIC PRIORITIES BY GEOGRAPHY
Executives’ viewsWeon arehow
doingto balance
everything we transformative
can to create a and disruptive strategies with operations
focused on efficiency and
workforce for thecost-effectiveness vary by region. Executives from the Americas are 86%
Fourth Industrial Revolution
We are not focused
more focused on disruption enough on creating
(31 percent) a
than executives from APAC (18 percent) and EMEA (22
14%
workforce for the Fourth Industrial Revolution
percent). APAC and EMEA executives are keeping a closer eye on reducing costs (42 percent and 41
percent respectively) than are Americans (32 percent).
We will need a complete rethinking of social/labor contracts 56%

The
The biggest difference
current labor is thewillfocus
laws and contracts oncontinue
generally speed to market of products and services;
to work 44% 65 percent of
APAC executives and 52 percent of EMEA executives prioritise increasing speed, compared
with31 percentOur
just ofcurrent
executives
education from the
system willAmericas.
continue to 65%
work and prepare individuals for Industry 4.0
We will need a complete rethinking of the education system 35%

Our organization’s relationships with our workforce will

61%
trend toward contractual, temporary and/or ad hoc employees
Our organization’s relationships with our workforce 39%
will trend more toward sustained, full-time employment

The skills that we require of our employees will

evolve much more rapidly than how they do today 56%
The skills that we require of our employees will 44%
evolve relatively similarly to those of today

The majority of our workforce can 61%

be trained to have the skills we require
We will need to hire new/different people to have the skills we require 39%

We will face social upheavals/increased income inequality 13%

The Fourth Industrial Revolution will lead to more equality and stability 87%

10
 The Fourth Industrial Revolution is here—are you ready?

Talent and the workforce:

evolution vs. revolution
TheFigure
future ofratework
5: Please your agreement with the following statements.

47%
30% 28% 27%

D
16% 18% 20% 19%
ESPITE the clear impact Industry 4.0 will will have a significant11% effe ct on their organisations
10%
have on workforces in every industry and (Figure 4).
geography,
My organization many executives
Talent/HR we surveyed
Becoming moreFurther,My theorganization
findings indicate
can that
Sociala and
vastgeographic
majority of
can influence
do not express urgency whenis oneitofcomes
the top to tackling
collaborativeexecutives
with influence
believe education/
they mobility
are doing all contributes
they can to
to prepare
environmental five topics that regulators and learning for employees the long-term health
the challenge of the
sustainability to future
my of the workforce.
organization As makerstheir
policy is oneworkforces for Industry
to a significant degree4.0, that they can rely
and sustainability of on
a significant
previously noted,degree frequently
when asked about discusses of the top three
the topics they the current education systems to properlymy organization
preparetoand
development areas for a significant degree
discuss most frequently, talent and human resources equip workers, and that their current employees can be
C-level executives
are at the very bottom of the list of issues (Figure 3), retrained as needed (Figure 6).
and only 22 percent of respondents believe that the At the same time, however, only a quarter of the
High-Growth Organizations (10%+) All Organizations Surveyed
uncertain impact of Industry 4.0 on the workforce executives surveyed expressed high confidence that

Figure 6: Which of the following statements about the Fourth Industrial Revolution's
impact on the workforce is more true?

We are doing everything we can to create a

workforce for the Fourth Industrial Revolution 86%
We are not focused enough on creating a
14%
workforce for the Fourth Industrial Revolution

We will need a complete rethinking of social/labor contracts 56%

The current labor laws and contracts will generally continue to work 44%

Our current education system will continue to 65%

work and prepare individuals for Industry 4.0
We will need a complete rethinking of the education system 35%

Our organisation’s relationships with our workforce will trend

61%
toward contractual, temporary and/or ad hoc employees Our
organisation’s relationships with our workforce 39%
will trend more toward sustained, full-time employment

The skills that we require of our employees will

evolve much more rapidly than how they do today 56%
The skills that we require of our employees will 44%
evolve relatively similarly to those of today

The majority of our workforce can 61%

be trained to have the skills we require
We will need to hire new/different people to have the skills we require 39%

We will face social upheavals/increased income inequality 13%

The Fourth Industrial Revolution will lead to more equality and stability 87%

11
The Fourth Industrial Revolution is here—are you ready?
they have the right workforce composition and skill
sets needed for the future. The fact is, many jobs and
required skills will change dramatically, though it may
be too early to say how, or to what degree. There are
two fundamental drivers that executives can consider
when trying to anticipate the changes: technology (e.g.,
robotics and cognitive/AI) and the changing workforce
(i.e., gig economy, crowdsourcing, etc.).14
Technology: Enhancing and
augmenting the workforce
Just 7 percent of executives consider their
organisations highly capable of planning for and
addressing the effects that technology-driven changes
have on their organisational structures and employees.
One area where the effects of technology are especially
concerning is robotics and AI. Industry leaders and
academics we spoke with envision more collaborative
jobs between humans and robots.15 While we typically
hear about the danger of low-skilled jobs being
supplanted by technology, the reality is that practically
every skill level will be affected.16 But “it’s not that the
person will augment the machine, it’s really the other
way around,” says Hitachi’s Householder. “The value-
add of the human worker will focus on essentially
enduring human skills such as supervision, creativity
and emotional intelligence.”
“We actually rely a huge amount on the profound
knowledge of all our employees,” says McLaren’s
Roberts. “When we are asking the team in production
for their ideas about how we should make next year’s
chassis, we are asking them because they really know
how to do this stuff, and they know how to do it despite
the very high-level, sometimes vague instructions that
are provided from our engineering system according to
the parameters that have been input into it.”
Historically, technology creates more jobs than
it destroys.17 Chun-Yuan Gu, president of the Asia,
Middle East and Africa region at ABB, believes in the
potential of Industry 4.0 to improve our work lives.
Gu describes the positive opportunities that using
advanced technologies can have on our lives. “Thanks
12
to the ability to gain knowledge virtually, we will be able
to optimise our brain power without expanding the
footprint,” he says. “People will work in collaborative,
decentralised ecosystems and will have flexibility to
work close to where they want to live.”
Creating such a collaborative, human-friendly
work/life environment will require a broader
approach than organisations are currently taking.
Many of the executives’ survey responses indicate
that when they do focus on the workforce, it is mostly
operational. organisations tend to be most capable
of using advanced technologies to enable employees
to be more efficient (47 percent). But this approach—
limiting the interaction of employees and technology to
efficiency—could hamper organisations’ success. To be
able to actively co-create the Industry 4.0 society, the
workforce must be fluent in technology as a powerful
force of transformation.18
“If you look at schools,
apprenticeships and
university programs,
governments should do
much more in fostering
an IT culture. Coding
and creating apps, for
instance, should become
a regular part of anyone’s
curriculum.”
—— Frithjof Netzer,
SVP and Chief Information Officer,
BASF

Changing workforce:
Attracting and developing
new types of talent
As organisations seek to make this jump
of utilising technology to transform their
workforce, this transition must be carried out
with a broad, social view in mind. “Even though
we embrace disruption and change, humans do
not function well in unstable positions. We need
to figure out how to create the kind of stability that
humans need in an environment where change is
inevitable and happening at a very rapid rate,” says
Barbara Dyer, executive director, Good
Companies Good Jobs Initiative at MIT.
What will make this further challenging is
that more than 61 percent of survey respondents
anticipate that their organisations’ workforces will
trend more toward contractual, temporary and/
or ad hoc employees. This is supported by a larger
economic trend that suggests one of the fastest-
growing segments of the workforce is those engaged
in alternative workforce arrangements with more
workers working off campus and off balance sheets.19
In fact, 95 percent of net new employment in the
United States between 2005 and 2015 consisted of
alternative work arrangements, and the number of
workers engaged in alternative work arrangements
steadily grew from approximately 10 percent in
2005 to nearly 16 percent by 2015.20 This new type
of worker and employer relationship will create both
opportunities and challenges to navigate.
To create stability in this new worker
arrangement, Dyer suggests instilling in all of us
the kind of navigational skills that enable us to
continuously move through a rapidly transitioning
economy in ways that give us confidence that we’re
going to have the ability to put a roof over our heads
and food on the table.
Our interviews with executives reveal that many
we spoke with are seeking to make navigational
skills part of their organisational cultures. The
executives are focusing not so much on the
transformation of current educational institutions
but on a disruption in the approach to learning—
that is, it is no longer about formal education, but
about an ongoing process of continually acquiring
new skills and knowledge.
13
The Fourth Industrial Revolution is here—are you ready?
Hitachi’s Householder talks about the need
for organisations to create a culture to encourage
employees to embrace learning. “It gives you the best
opportunity to succeed. Because we could get the
smartest people in the world to figure out the kinds
of skills that we need to create for our workforce in
the future, and I guarantee that we’re going to get
most of it wrong, just because it’s unclear how it’s
all going to take shape,” he says. “If you can create
enough of a learning and entrepreneurial culture to
experiment and put things into action and figure out
what works, and then scale it, I think you have the
best opportunity for success.”
For organisations that go beyond employee
efficiency to consider how humans will interact with
technology, how their organisations will serve non-
traditional employees, and how they will educate
all their workers, Industry 4.0 has the potential to
create opportunities for new roles—ones that enable
humans to play to their strengths while partnering
with technology for greater innovation, alternative
work environments, and reshaped roles and
institutions.21
EXPLORE FURTHER
Future of Work22:
Driven by accelerating connectivity, new talent
models and cognitive tools, work is changing. As
robotics, AI, the gig economy and “crowds”—on-
demand, scalable external talent—grow, jobs
are being reinvented, creating the augmented
workforce. We must reconsider how jobs are
designed and work to adapt and learn for
future growth.
2017 Deloitte’s Global Human
Capital Trends23:
A number of converging issues are driving
the need to “rewrite the rules.” Technology is
advancing at an unprecedented rate, but many
organisations retain industrial-age structures
and practices that are long outdated. Forward-
looking leaders have an opportunity to help their
organisations adapt to technology, help people
adapt to new models of work and careers, and
help business adapt to and encourage positive
changes in society, regulation and public policy.
The Fourth Industrial Revolution is here—are you ready?

HUMAN CAPITAL TRENDS

According to “2017 Deloitte Global Human Capital Trends,” the problem is not simply one of
“reskilling” or planning new and better careers.24 Instead, organisations must look at leadership,
structures, diversity, technology and the overall employee experience in new and exciting ways.
Robotics, AI, sensors and cognitive computing have gone mainstream, along with the open-talent
economy. organisations can no longer consider their workforces to be only the employees on their
balance sheets, but must include freelancers, gig economy workers and crowds. These on- and off-
balance-sheet workers are being augmented with machines and software.25 Together, these trends
will result in the redesign of almost every job, as well as a new way of thinking about workforce
planning and the nature of work.26

This requires adopting a human capital management approach for Industry 4.0. Many
organisations still retain HR practices—from training and development to managing culture—from
the last industrial revolution. They need new models to help leaders and organisations adapt to
technology, help people adapt to new models of work and careers, and help the organisation act
as a positive force in society.

CONFIDENCE ABOUT WORKFORCE BY GEOGRAPHY

Confidence about whether their organisations are ready to address the impact of Industry 4.0 on
the workforce correlates with levels of confidence about the ongoing relevance of humans. Almost
a third of respondents from the Americas and EMEA feel they are highly prepared for the impact of
Industry 4.0 on their workforces. The least confident are respondents from APAC (10 percent).

There is a divergence in how different geographies perceive the role of humans in the movement
of people and goods. A majority of respondents from APAC (70 percent) believe that autonomous
technologies will increasingly replace human workers, while nearly half (49 percent) of executives
from EMEA think that. Respondents from the Americas see machines augmenting humans (North
America: 77 percent; Latin America: 78 percent).

14
 The Fourth Industrial Revolution is here—are you ready?

Technology: challenged
vs. prepared
How ready are organisations to
embrace industry 4.0 technology?

T
HE shift to Industry 4.0 means the ability “The combination of digital technologies and a user/
to adopt and integrate digital and physical consumer desire for convenience, comfort and real-
technologies to improve operations, become time response enables and challenges us to do things
more productive, grow and innovate. This can that we’ve never thought we would be doing,” says
represent a profound change for any organisation. BASF’s Netzer.
Executives understand this already; close to
three-quarters note that they focus technology
initiatives on their operations and processes (Figure Figure 7: Which of the following
7). areas are currently the focus of your
But leveraging the full transformational potential of technology initiatives? (Select up to 3)
Industry 4.0 requires also taking a broader perspective
about how to use smart, connected technologies. In 73% Figure 10: What are th
these early stages of the revolution, organisations have challenges your organ
become highly capable at using digital technologies seeks to adopt new te
to do the same things they’ve always done, only faster their applications? (Se
and better. Already, 47 percent of executives consider 56%
their organisations highly capable at using advanced
48%
technologies to enable employees to be more efficient.
But true Industry 4.0 organisations use advanced 40% 43%
technologies to take it a step further and create new 38% 37%
36%
business models, determining new ways in which to 30% 32%
2
create, deliver and capture value.27 Making that leap from
familiar terrain to true innovation can prove challenging. 20%
Industry 4.0 is revolutionary because it enables
organisations to capture data from the physical world,
analyse it digitally and drive informed action back in 6%
the physical world. This continuous and cyclical flow
of information, known as the physical-to-digital-
to-physical loop, enables organisations to react in real Operations/processes Lack of internal alignm
which strategies to fol
time to shifts in the ecosystem.28 Beyond that, it also Marketing/sales/customer support
enables them to use the mass of collected data to Lack of collaboration w
Product development
begin to recognise patterns, simulate and model Short-termism
potential future scenarios, and learn and even predict Talent management
Lack of adequate tech
future shifts. This can make them more responsive to Manufacturing/production
Lack of rank-and-file a
unexpected shifts in demand, more flexible in the Supply chain/sourcing
Lack of vision by the le
face of unpredictable environmental shifts and better Shipping/logistics Lack of technology kno
prepared to address challenges, both internally and
externally.29 Budgetary issues
We do not typically ha
15 adopting these techno
Other
The Fourth Industrial Revolution is here—are you ready?

These capabilities are made more effective as more Figure 8: How prepared is your Figure 9: To what exten
organisation to address the following the following statemen
stakeholders become involved. organisations that
issues? organization’s readines
expand their use of Industry 4.0 technologies to include Respondents who answered, “Highly new smart and autono
suppliers, customers, workers, partners and others prepared”; only select responses shown Respondents who answer
in their ecosystems can find more transformative only select responses show
benefits.30 For instance, data about how a customer 20%
uses a product or service can be fed back into the 17% 22%
15%
design process, enabling an organisation to develop
16%
a better product that more effectively suits customers’
needs; to pinpoint when and how a product breaks
to troubleshoot more effectively and predictively; or
Emergence Blurred lines Smart and
to develop wholly new products based on previously of new between autonomous
unseen customer behavior.31 businesses industries technologies
or delivery
For example, at chemical manufacturer BASF, models We have a strong unde
data analysis is used to improve the efficiency of technologies will chang
manufacturing processes and anticipate client organizational structure
demand, as well as to consult clients on the best We have a strong unde
Figure 8: How prepared is your Figure 9: To what extent do you agree with
applications of the organisation’s
organization to address the solutions.
following “By the following statements about your integrate our solutions
combining our data with customers’ data, we are able infrastructures (e.g., sm
issues? organisation’s readiness to benefit from
to deriveRespondents
recommendationswho answered, “Highly process
for how to improve prepared”; new smart and autonomous technologies? We have a strong unde
onlyatselect
parameters their responses
plants,” saysshown
Netzer. Respondents who answered, “Highly confident”; they will change the wa
only select responses shown our goods/services
These new value-creation models require
ecosystems20% that can cut across different internal We have a strong busin
17% 22% 22% technology solutions
functions, external organisations and industries. 15% For
example, the rise of autonomous vehicles is blurring the 16%
lines among several industries, including automotive,
communications and entertainment.32 8%
Surveyed executives admit that they are not yet wholly
Emergence Blurred lines Smart and
comfortableofwith
newapplying technology
between to transform their
autonomous
businesses
business models industries
and drive new opportunitiestechnologies
to create
or delivery
value. Less than
modelsa quarter consider themselves ready for We have a strong understanding of how these
new delivery models or blurred lines between industries. technologies will change our workforce and our
Further, the proportion of those who can connect a strong organisational structure
business case to advanced technology investments is in We have a strong understanding around how to
the single digits (Figures 8 and 9). integrate our solutions within the external
infrastructures (e.g., smart cities)
One reason for their low level of confidence may
be that, as noted above, their strategies continue to We have a strong understanding around how
they will change the way in which we deliver
focus on traditional near-term business operations,
our goods/services
as opposed to focusing on longer-term opportunities
to create new value for their direct and indirect We have a strong business case for our new
technology solutions
stakeholders. In fact, when asked about the most
common challenges their organisation faces when
adopting new technologies, executives most often point
to a lack of internal alignment about which strategies to
follow, lack of collaboration with external partners and
short-termism (Figures 10).
Considering that executives are not fully
comfortable with the most transformative uses of

16
 he following
the focus of your The Fourth Industrial Revolution is here—are you ready?
ves? (Select up to 3)

Figure 10: What are the most common Figure 11: What influences your
challenges your organisation faces as investment in advanced technologies?
it seeks to adopt new technologies and (Select up to 3)
their applications? (Select up to 3)
36% 36%
32% 32% 32% 32%
29% 28% 28%

43%
40% 15%
38% 37%
36%
30% 32%
29% 29% 29%

20% If new technology can be foundational

for new business models
Ability to integrate new technology with
what we already have in-house
6%
3%
Available talent and skills to leverage the technology
0% Long-term impact these technologies will
Lack of internal alignment about have on our organisation
ses
which strategies to follow Our level of understanding about the technologies
stomer support
Lack of collaboration with external partners Long-term impact these technologies
ent will have on society
Short-termism
t Increase in customer satisfaction/engagement
Lack of adequate technologies
duction Potential ROI/value associated with the technology
Lack of rank-and-file adoption
ing Ability to connect to other solutions that
Lack of vision by the leaders exist in the real world
Lack of technology know-how Ability to show quick wins

Budgetary issues
We do not typically have challenges
adopting these technologies As executives seek to implement advanced
Figure 12. Benefits of a focus on technology
Other technologies, it is natural to build on their existing
assets, but it’s important that new technologies
74%
lay the groundwork for new72% business models. 67%
technologies, and that nobody can know which Our survey suggests that executives are guided
scenarios will ultimately become commonplace, in their technology 47% investments both by what can 49%
44%
how can executives make decisions about which work with their current technologies (36 percent),
technologies or business models to pursue? There as well as what can become foundational for new
can be many ways to pursue digital transformation; business models (36 percent) (Figure 11).
indeed, organisations can pursue multiple Our interviews with executives reflect this
transformations simultaneously, throughout their duality. Barco approaches technology innovation
ecosystems. In research on Industry 4.0, Deloitte byhave
We strategising on two We
a strong understanding levels: mature
are ready to adopt, cor
and e We believe we have We
of how to integrate effectively use, smart and influence over
explored the two main impacts digital technologies business areas and
our solutions within the
new growth initiatives. “In
autonomous technologies
the environmental sustainability
could have on organisations—streamlining business core business,
external we are really looking
infrastructures atorganization
within our operational
(e.g., smart cities)
operations and boosting business growth—and effici ency: How can we further optimise? How
identified the three main pillars in which Industry can we have more working
New technologies productivity?
are the key differentiatorWe New technologies are no
4.0 technologies could drive tangible value: focus on performance,” says Barco’s Bourgois.
among products, within the supply chain and for “For the growth initiatives, when we believe that
customers 33. Each of these areas demonstrates the idea has potential, we are looking at how
myriad ways Industry 4.0 technologies can we can be swift, how we can create the needed
transform every facet of an organisation.

17
The Fourth Industrial Revolution is here—are you ready?

outcome and whether the solution responds to a
customer need. It focuses on ‘Design Thinking.’”
These days, a new opportunity may transition
into a mature product or service fast. Jus t
a couple of years ago, Barco came up with a
wireless presentation device called Clickshare,
removing the burden of cables to share content. It
is growing at a pace exceeding 20 percent and is now
at a stage that the organisation is pushing it to become
an even bigger star, with more efficiencies and new
capabilities—hardware and software combined at
users’ fingertips.
This swift transition from opportunity to maturity
highlights not only the speed at which technologies
are transforming business, but also the need to strike
the right balance in the approach to technology
innovation—creating opportunity for new value
creation and the longer-term business case.

“Ideas that are good for humans will take root,

even if today they seem far-fetched. For example,
autonomous vehicles–if they indeed eliminate
most traffic accident deaths–will be accepted as
the safer way to drive. After all, in most of the
world we don’t allow cigarette ads anymore. I think
in the future this idea of ‘fun to drive’ is going to
sound as ridiculous as a smoking commercial.”
—— Joi Ito,
Director,
MIT Media Lab

EXPLORE FURTHER

Connecting the digital and physical worlds through Industry 4.034:

Industry 4.0 can create interconnected digital enterprises, ecosystems, supply networks and
consumer interactions that communicate, analyse, learn and apply information to drive actions in
the physical world.

Creating a new mobility ecosystem35:

Will technological advances and shifts in social attitudes lead to our no longer owning or driving
vehicles? The global auto industry’s transformation has far-reaching implications for how we move
from point A to point B and, in turn, affects carmakers, energy organisations, insurers, healthcare,
government funding and more. Value shifts as a new ecosystem of mobility emerges.

Achieving digital maturity36:

A global survey of more than 3,500 managers and executives reveals five key practices of
organisations that are developing into more mature digital organisations.

18
 for new business models
Ability to integrate new technology with
what we already have in-house
Available talent and skills to leverage the technology
Long-term impact these technologies will
have on our organization
The Fourth Industrial Revolution is here—are you ready?
Our level of understanding about the technologies
Long-term impact these technologies
will have on society
Increase in customer satisfaction/engagement
TECHNOLOGY IS KEY
Potential ROI/value associated with the technology
How executives approach technology strongly correlates with how well prepared they believe
Ability to connect to other solutions that
they are
existfor Industry
in the 4.0 and the business case they can make for new technologies. Those who
real world
view Ability
implementing new technologies as the key competitive differentiator (20 percent) are more
to show quick wins
confident they are prepared across a broad range of areas than those for whom technology is one
of many priorities.

Figure 12. Benefits of a focus on technology

74%
72% 67%
62%

47% 49%
44% 45%

We have a strong understanding We are ready to adopt, and We believe we have We are capable regarding using
of how to integrate effectively use, smart and influence over advanced technologies
our solutions within the autonomous technologies environmental sustainability to solve pressing
external infrastructures within our organisation organisational challenges
(e.g., smart cities)

New technologies are the key differentiator New technologies are not the key differentiator

NORTH AMERICAN FOCUS ON TECHNOLOGY

Close to a third of respondents from the Americas consider technology a key competitive
differentiator, compared with 12 percent in APAC and 18 percent in EMEA. This focus on
technology breeds a degree of confidence: More respondents from North America believe
that they have a strong business case for their technology solutions (14 percent), with APAC
respondents being the most doubtful (5 percent), and Latin America and EMEA coming in at 9
percent. North American respondents also believe they have a better handle (18 percent) on
what’s required for business success in Industry 4.0 than do their APAC counterparts (12 percent).
That said, the level of confidence is relatively low across all groups.

19
The Fourth Industrial Revolution is here—are you ready?
Summary
I
NDUSTRY 4.0 represents the ways in which smart,
connected technology becomes embedded within
organisations, as well as peoples’ daily lives. This
revolution of digital and physical technologies
gives rise to vast possibilities—but it can also
upend the status quo and create nearly as much
uncertainty as it does opportunity. A newcomer’s
idea can disrupt an established industry, or a
broad set of digital data augmented by artificial
intelligence and sophisticated models can rival
expertise gathered over many years of hands-on
experience. As expressed by Chun-Yuan Gu, “This
knowledge, which takes an organisation decades to
gain, becomes more accessible to new organisations
with less experience but the right technology.”
In this way, Industry 4.0 also enables
organisations to take advantage of network-based,
data-driven, autonomous and cognitive digital and
physical technologies to create truly innovative
business solutions—rather than simply using
technology to pursue the same old ways of doing
business. In the process, however, its effects can
ripple outward to touch everything that organisation
touches. It is therefore crucial to understand the
important connections between business and social
needs; between financial outcomes and innovative
strategies; between workforce productivity and
people’s feeling of stability and well-being; between
integrating existing technologies and creating
completely new solutions.
Our research has revealed that, overall,
executives around the world are in the early stages
of readying their organisations to harness the full
potential of Industry 4.0. As they progress, there are
opportunities to strengthen key connections that will
benefit their clients, their people, their
organisations, their communities and society more
broadly:
20
• Social impact. Accept that each and every
organisation has the power to influence, in
multiple ways, the promise of the Fourth
Industrial Revolution to create a more equitable
and stable world.
• Strategy. Take a holistic approach to strategic
planning, exploring how core capabilities can be
enhanced by new ones to develop new products
and services, and create new value for a broader
range of stakeholders.
• Talent and workforce. Make it a priority
to prepare workers to navigate the age of
Industry 4.0 by creating a culture of learning
and collaboration, and creating training
opportunities—both within the organisation as
well as in underserved communities.
• Technology. View technology as the most
powerful differentiator in an Industry 4.0 world,
and invest in integrating new applications that
can support new business models. And—most
importantly—understand that Industry 4.0
technologies shouldn’t be limited to just one part
of the organisation; they should be integrated
across the organisation to better support a broad
spectrum of responsibilities and stakeholders
necessary to thrive in an Industry 4.0 world.
While the Fourth Industrial Revolution has
the power to change many things across a broad
spectrum—work, operations, society—one thing is
certain: It’s here, and executives need to be ready. It
is clear that the old way of doing things isn’t enough
anymore, and those who make the most impact will
be the ones who embrace all facets of Industry 4.0
and all the opportunities it will bring.
 The Fourth Industrial Revolution is here—are you ready?

METHODOLOGY

This research is based on a survey of 1,603 global executives conducted by Forbes Insights in the second
half of 2017. Survey respondents represented 19 countries from the Americas, Asia and Europe, and
came from all major industry sectors. All survey respondents were C-level executives, including CEOs/
presidents (16 percent), with the rest evenly divided among COOs, CFOs, CMOs, CIOs and CTOs. All
executives represented organisations with revenue of $1 billion or more, with more than half
(53 percent) coming from organisations with more than $5 billion in revenue.

Additionally, Forbes Insights and Deloitte conducted one-on-one interviews with global industry leaders
and academics.

ACKNOWLEDGMENTS

Deloitte and Forbes Insights would like to thank the following for sharing their time and expertise:

Xavier Bourgois, Chief Information Officer, Barco

Mark Cotteleer, Managing Director, Deloitte Center for Integrated Research

Barbara Dyer, Executive Director, Good organisations Good Jobs Initiative, MIT

John Flint, Chief Executive, Retail Banking and Wealth Management, and CEO-elect, HSBC

Chun-Yuan Gu, President of Asia, Middle East and Africa Region, ABB

Brian Householder, President and Chief Operating Officer, Hitachi Vantara

Joi Ito, Director, MIT Media Lab

Frithjof Netzer, SVP and Chief Digital Officer, BASF Group

Simon Roberts, Chief Operations Officer, McLaren Racing

Brenna Sniderman, Senior Manager, Deloitte Center for Integrated Research

21
The Fourth Industrial Revolution is here—are you ready?

ENDNOTES

1. Deloitte’s Shift Index aims to help executives understand and take advantage of the long-term trends, driven by
public policy and the exponential rate of change in the digital infrastructure, that are causing significant changes
around them. https://www2.deloitte.com/us/en/pages/center-for-the-edge/topics/deloitte-shift-index-series.html

2. John Hagel, John Seely Brown, Maggie Wooll and Andrew de Maar, “The paradox of flows: Can hope flow from
fear? 2016 Shift Index,” Deloitte Insights, Dec. 13, 2016.

3. “Pro-business,” but expecting more, The Deloitte Millennial Survey 2017.

4. Marcus Shingles, Bill Briggs and Jerry O’Dwyer. “Social impact of exponential technologies: Corporate social
responsibility 2.0,” Deloitte Insights, February 24, 2016.

5. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-deloitte-millennial-
survey-2017-executive-summary.pdf

6. https://dupress.deloitte.com/dup-us-en/focus/tech-trends/2016/social-impact-of-exponential-technologies.
html

7. Brenna Sniderman, Monika Mahto and Mark Cotteleer, “Industry 4.0 and manufacturing ecosystems: Exploring
the world of connected enterprises,” Deloitte Insights, February 22, 2016.

8. Adam Mussomeli, Doug Gish and Stephen Laaper, “The rise of the digital supply network: Industry 4.0 enables
the digital transformation of supply chains,” Deloitte Insights, December 1, 2016.

9. Brenna Sniderman, Kelly Monahan and John Forsythe. “3D opportunity for engineers: Using behavioral science
to help build a new mindset,” Deloitte Insights, January 25, 2016.

10. Ibid.

11. Bill Briggs, interviewed by Tanya Ott, “Preparing for digital innovations,” Deloitte Insights, February 8, 2017.

12. https://www2.deloitte.com/global/en/pages/strategy-operations/monitor-deloitte/articles/courage-under-fire-
monitor-deloitte.html

13. https://www2.deloitte.com/global/en/pages/risk/articles/directors-alert-courage-under-fire.html

14. Jeff Schwartz, Heather Stockton and Kelly Monahan, Forces of change: The future of work, Deloitte Insights,
2017, https://dupress.deloitte.com/dup-us-en/focus/technology-and-the-future-of-work/overview.html

15. John Hagel, Jeff Schwartz and Josh Bersin, Navigating the future of work, Deloitte Insights, 2017, https://dupress.
deloitte.com/dup-us-en/deloitte-review/issue-21/navigating-new-forms-of-work.html

16. Ibid.

17. Ian Stewart, Debapratim De and Alex Cole, “Technology and people: The great job-creating machine,” https://
www2.deloitte.com/uk/en/pages/finance/articles/technology-and-people.html

18. Anthony Stephan, Martin Kamen and Catherin Bannister, “Tech fluency: A foundation of future careers,” Deloitte
Review, 2017, https://dupress.deloitte.com/dup-us-en/deloitte-review/issue-21/tech-fluency-mastering-the-
language-of-technology.html

22
 The Fourth Industrial Revolution is here—are you ready?

19. Sonny Chheng, Kelly Monahan and Karen Reid, “Beyond office walls and balance sheets: Culture and the
alternative workforce,” Deloitte Review, 2017.

20. Ibid.

21. John Hagel, Jeff Schwartz and Josh Bersin, “Navigating the future of work: Can we point business, workers, and
social institutions in the same direction?” Deloitte Insights, July 31, 2017.

22. https://dupress.deloitte.com/dup-us-en/focus/technology-and-the-future-of-work.html

23. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/hc-2017-global-human-
capital-trends-gx.pdf

24. Josh Bersin, Bill Pelster, Jeff Schwartz and Bernard van der Vyver, Introduction: Rewriting the rules for the
digital age, Human Capital Trends Report, 2017, https://dupress.deloitte.com/dup-us-en/focus/human-capital-
trends/2017/introduction.html

25. Jeff Schwartz, Laurence Collins, Heather Stockton, Darryl Wagner and Brett Walsh, The future of work: The
augmented workforce, Human Capital Trends Report, 2017, https://dupress.deloitte.com/dup-us-en/focus/
human-capital-trends/2017/future-workforce-changing-nature-of-work.html

26. Jeff Schwartz, Heather Stockton and Kelly Monahan, “Forces of change: The future of work,” Deloitte Insights,
2017, https://dupress.deloitte.com/dup-us-en/focus/technology-and-the-future-of-work/overview.html

27. Mark Cotteleer and Brenna Sniderman, “The Forces of Change: Industry 4.0,” Deloitte Insights, December 18,
2017.

28. For further information about the physical-to-digital-to-physical loop, see Brenna Sniderman, Monika Mahto and
Mark Cotteleer, “Industry 4.0 and manufacturing ecosystems: Exploring the world of connected enterprises,”
Deloitte Insights, February 22, 2016.

29. For further information on simulation, modeling and prediction and their impact on operations and planning,
see Aaron Parrott and Lane Warshaw, “Industry 4.0 and the digital twin: Manufacturing meets its match,” Deloitte
Insights, May 12, 2017; and Rick Burke, Adam Mussomeli, Stephen Laaper, Martin Hartigan and Brenna Snider-
man, “The smart factory: Responsive, adaptive, connected manufacturing,” Deloitte Insights, August 31, 2017.

30. Adam Mussomeli, Doug Gish and Stephen Laaper, “The rise of the digital supply network: Industry 4.0 enables
the digital transformation of supply chains,” Deloitte Insights, December 1, 2016.

31. Jeff Hood, Alan Brady and Raj Dhanasri, “Industry 4.0 engages customers: The digital manufacturing enterprise
powers the customer life cycle,” Deloitte Insights, December 15, 2016.

32. Cotteleer and Sniderman, “The Forces of Change: Industry 4.0.”

33. Mark Cotteleer and Brenna Sniderman, “The Forces of Change: Industry 4.0,” Deloitte Insights, December 18,
2017.

34. https://dupress.deloitte.com/dup-us-en/focus/industry-4-0.html?icid=left_industry-4-0

35. https://dupress.deloitte.com/dup-us-en/focus/future-of-mobility/transportation-technology.html

36. https://dupress.deloitte.com/dup-us-en/focus/digital-maturity/digital-mindset-mit-smr-report.html

23
Local Contact

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Chief Digital & Innovation Officer
Deloitte Africa
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Leader
Deloitte Africa
mivincent@deloitte.co.za

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Africa Automotive Sector Leader
Deloitte Africa
ruredfearn@deloitte.co.za
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